Hospitals Scramble To Limit Readmissions Under ACA

By John Murawski, The News & Observer (Raleigh, N.C.)

Nov. 24--THE PATIENT -- decked out in non-skid footies, a loose hospital gown and a breathing tube -- prays she's finally on the mend. At age 81, Juanita King had logged nearly five weeks at WakeMed Hospital since October after her breathing became so labored she had trouble walking.

The Clayton grandmother, weakened by a failing heart and obstructed lungs, wasn't home even two weeks after the first hospital stay before returning to WakeMed earlier this month for another round of needles, meds and tests.

WakeMed, along with hospitals across the country, is scrambling to keep patients like King from coming back. Under federal penalties that kicked in Oct. 1 as part of the Patient Protection and Affordable Care Act, hospitals lose Medicare reimbursements if their patients are readmitted at an excessive rate.

WakeMed officials, for example, estimate that the 15 readmissions since 2010 that Medicare deemed excessive will cost the Raleigh health care company more than $400,000 in the coming year.

To ease the financial sting, hospitals increasingly are trying to manage patients' health care after they are discharged. Hospital personnel make follow-up calls, schedule doctors' visits and set up therapy appointments. Duke University Health System is planning to offer apps designed to send prompts and reminders for patients to take meds and report symptoms.

Hospital administrators say the pressure to reduce readmissions is forcing them to take steps that are long overdue -- by coordinating with nursing homes and family caretakers to treat health problems early, before they blow up into emergencies.

King saw a difference at Wake-Med on her return visit.

"This time when I came back in, it was more focused, it seemed to me," King said from her WakeMed recliner, covered up to her neck by a blanket. "The cardiac and respiratory team was really working together. They apparently identified what my needs were."

The penalties in the federal health care law are designed to reduce unnecessary costs and curb waste. Chronically ill, elderly patients, typically on fixed incomes, are among the costliest in the system; some rotate in and out of emergency rooms as a way of dealing with poor health.

Medicare's negative reinforcement is already showing results and reducing readmission rates among Triangle hospitals, and administrators here say patients are better off on account of the follow-ups, monitoring and early intervention. The new policy is generating "lots of energy, lots of excitement about the possibilities," said Nancy Foster, vice president for quality and patient safety policy at the American Hospital Association.

But industry advocates warn of a potential downside: Struggling hospitals, spooked by the prospect of huge penalties, could develop an unhealthy fixation on finding ways not to readmit patients who need hospital care.

Already hospitals nationwide have seen an uptick in patients being steered to observation beds rather than getting admitted, Foster said. Hospitals in economically distressed areas with limited health care options are most likely to readmit patients and pay penalties for doing so, she said.

"It's hard to think there will be a financial penalty against your organization to do the right thing by your patient." Foster said. "We don't think that hospitals that serve impoverished, safety-net communities should be penalized because those communities lack the necessary resources."

Readmissions are only one of several factors the federal government is tracking to reduce the cost of health care. All told, within several years hospitals could face up to an 8 percent reduction in Medicare reimbursements -- for failing to meet new federal standards for electronic medical records and for too many infections and errors, among other quality measures, according to the American Hospital Association.

Insurance companies are likely to adopt similar measures, based on the model developed by Medicare, the nation's federal insurance program for the elderly. Blue Cross Blue Shield of North Carolina, the state's largest private insurer, now offers financial rewards for hospitals that reduce readmissions. But unlike Medicare, Blue Cross doesn't penalize hospitals for too many readmissions, said spokesman Lew Borman.

The maximum Medicare penalty this year for excessive readmissions is a 1 percent reduction in Medicare reimbursements. The fine will increase to 3 percent in 2015, which can translate to millions of dollars in lost revenue for a hospital.

The fines apply for readmitting too many patients with at least one of three conditions -- heart failure, heart attack or pneumonia -- within 30 days of discharge. Medicare is expected to add more diagnoses in the coming years, expanding the range of potential penalties.

A readmission can be for any cause -- usually not the fault of the hospital. A pneumonia patient who leaves WakeMed, has a car wreck on the way home and is readmitted to Rex Hospital? Under Medicare, that counts as a readmission against WakeMed.

Each hospital is allotted a certain number of readmissions, based on a complex formula that factors in fluke scenarios like auto accidents, slips-and-falls and others unrelated to heart conditions or pneumonia.

Patients often go back into a hospital because they have trouble following directions for their medications. During a hospital stay and while recuperating, patients can be disoriented and confused, making it hard to keep track of multiple medications.

Heart patients, for example, are urged to adhere to a low sodium diet, but not all comply. "We had one patient who was taking their pills with pickle juice," said Linda Butler, chief medical officer at Rex Healthcare in Raleigh.

In North Carolina, a half-dozen hospitals were levied either the maximum Medicare penalty for excessive readmissions or a penalty very close to the 1 percent max. The hospitals are in Ahoskie, Lumberton, Eden, Williamston, Hamlet and Rocky Mount, according to an analysis by Kaiser Health News. Hospital officials note that areas where hospitals get hit with high penalties are typically in economically depressed areas with limited access to therapists, specialists and other resources essential for preventing hospital readmissions.

Still, a number of North Carolina hospitals avoided Medicare fines for return visits, and many of those are also in rural areas.

In the Triangle, Rex Hospital was penalized 0.16 percent, UNC Hospital 23 percent, WakeMed 0.29 percent and Duke University Hospital 0.47 percent. Duke's penalty, the highest in the Triangle, will cost the system about $600,000 in reduced Medicare reimbursements from the federal government, said Thomas Owens, chief medical officer at the Duke University Health System.

Owens noted that the penalty patterns in the Triangle reflect the type of patient each hospital treats. Duke hospital draws heart-transplant and lung-transplant patients from a broad region, and the Durham facility can be penalized if any of its patients are readmitted for any reason to other hospitals.

"We get heart attack patients from all over North Carolina and southern Virginia," Owens said. "Thirty-nine percent of our readmissions for heart attacks go to a small rural hospital."

Owens noted that the measures Duke uses to prevent readmission are "a fraction of the cost of coming in the hospital."

Among the steps taken by the Duke system: equipping outpatient clinics with IV medications, infusions and monitoring technology previously available only at the hospital.

Rex runs a readmission prevention clinic two days a week where dietitians, clinical nurses and pharmacists coach recently discharged patients on staying healthy. Rex's Medicare penalty, for six readmissions too many, will cost the Raleigh hospital an estimated $80,000.

Through various strategies, WakeMed has cut readmissions by about 5 percent this year. The health care company has compiled details on services offered by more than a dozen area nursing homes. WakeMed refers to its "grid" when deciding where to send patients after discharge.

"It's basically sharing information which in the past has never been shared," said Christy Henry, medical director of case and clinical resource management at Rex. "In the past, no one really knew what the nursing homes could provide."